Text: Department of Transportation Nov. 21 on U.S.-China Air Rights
(Slater urges expansion of air services between U.S., China)A fourth U.S. airline may soon begin service in the U.S.-China air transportation market, U.S. Transportation Secretary Rodney E. Slater said in a November 21 Department of Transportation news release.
In a step that could lead eventually "to full liberalization" in air services between the two countries, Slater said he proposed the expansion in U.S.-China air services by the "tentative decision" of choosing United Parcel Service (UPS) to be the fourth American carrier authorized to serve China.
UPS is an all-cargo airline. "President Clinton and Vice President Gore have made expanding trade and global opportunity a top priority because it leads to economic growth and creates opportunity here in the United States," Slater said.
The Transportation Department, he said, had been working "for many months to bring this decision forward."
Slater said he was "committed to working to further liberalize air services between the United States and China so that the opportunities under the latest agreement between our countries will not be the end, but the beginning of the opening of the U.S.-China market."
Following is the text of the news release:
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U.S. DEPARTMENT OF TRANSPORTATION
Office of the Secretary, Office of Public Affairs
Washington, DC 20590FOR IMMEDIATE RELEASE
Tuesday, November 21, 2000
Contact: Bill Adams Tel.: (202) 366-5580
DOT 226-00U.S. Transportation Secretary Slater
Calls for Liberalization of U.S.-China Aviation Rights,
Announces Tentative Decision on New ServicesU.S. Transportation Secretary Rodney E. Slater today said that he has proposed an expansion in U.S.-China air services eventually leading to full liberalization, building on today's tentative decision selecting the all-cargo airline United Parcel Service (UPS) as the fourth U.S. carrier authorized to serve China, and on the recent U.S.-China meeting in Seattle resulting in an invitation to U.S. carriers to discuss additional services with their Chinese-carrier partners.
Today's tentative decision builds on Secretary Slater's February 2000 trip to Asia to promote transportation policies that foster President Clinton and Vice President Gore's goals of global prosperity, stability and democracy.
"President Clinton and Vice President Gore have made expanding trade and global opportunity a top priority because it leads to economic growth and creates opportunity here in the United States," U.S. Transportation Secretary Rodney E. Slater said. "The department has been working for many months to bring this decision forward, and I am committed to working to further liberalize air services between the United States and China so that the opportunities under the latest agreement between our countries will not be the end, but the beginning of the opening of the U.S.-China market."
In a show-cause order issued today, the department tentatively selected UPS as a new entrant to the market, and tentatively granted it six weekly round-trip flights to provide all-cargo service to Beijing and Shanghai from Ontario, Calif., and Newark, N.J., via Anchorage, Alaska. In addition, the department tentatively granted additional weekly round-trip flights to the three airlines already serving China. United Airlines may add two weekly round-trip flights, and Northwest Airlines and Federal Express one weekly round-trip flight each, to expand their existing U.S.-China services. DOT will solicit and review public comment on the tentative decision before issuing a final decision. Objections are due in 21 days, and answers to objections 10 days afterward.
In a related action, U.S. and Chinese officials met in Seattle on Oct. 20 for informal aviation consultations, discussing a range of issues. The two countries invited American Airlines and Delta Air Lines, the U.S. carriers that have code-sharing arrangements with Chinese carriers but are not designated for direct service to China, to discuss with their Chinese code-share partners a type of wet lease/code-share arrangement. This would involve the Chinese carrier leasing a plane and crew from its U.S. code-share partner to operate services authorized for Chinese carriers under the U.S.-China aviation agreement. If agreements to engage in this type of code-sharing can be reached, American and Delta would be able to fly between the United States and China using their own aircraft and codes, allowing substantially expanded services by the two carriers as well as by Chinese carriers. Such agreements would be subject to approval by both governments.
The two countries are also recommending to their respective carriers that they coordinate with their code-share partners to reach agreement permitting Delta and American to open ticket offices in Shanghai and Guangzhou to sell tickets on their code-share services. Such agreements would be subject to approval by the authorities in each country.
Secretary Slater said the U.S. has proposed to China an expansion of frequencies, designations and additional code-share opportunities during the period 2002-2004, after which the United States would seek a fully liberalized, Open-Skies agreement. Currently, round-trip flights between the two countries are limited to 44 for each country's airlines, with an additional 10 to be added in April 2001.
The United States has Open-Skies agreements with 50 countries around the world, four of which were concluded within the last three months. Open-Skies agreements permit unrestricted service by the airlines of each side to, from and beyond the other's territory, without restrictions on how often carriers fly, the kind of aircraft they use and the prices they charge.
Secretary Slater also noted that, in a further liberalization of air services in the Pacific region, the United States reached agreement on Nov. 15 with four aviation partners Brunei, Chile, New Zealand and Singapore on the first multilateral Open-Skies agreement, permitting unrestricted service by the airlines of each country to, from and beyond the territory of the other countries. The Secretary credited the department's December 1999 Beyond Open Skies conference, which opened discussions for implementing a new multilateral aviation policy architecture, with laying the foundation for this agreement. The historic agreement, reached at the meeting of the Asia-Pacific Economic Cooperation group in Brunei, fulfills Secretary Slater's goal of beginning to move beyond the negotiation of aviation agreements on a bilateral basis and into an environment in which groups of nations, and ultimately the entire world, agree to free trade in aviation services.
The U.S. government has continued to work with Chinese authorities to permit expanded U.S.-China air services. At Secretary Slater's International Transportation Symposium, held Oct. 9-12 in Washington, the Secretary met with Chinese Communications Minister Huang Zhendong to discuss a range of transportation issues, including civil aviation. The following week, representatives of DOT, other U.S. government agencies and aviation industry leaders, together with Chinese government, airport and airline officials, participated in the first U.S.- China Aviation Symposium, hosted by Sen. John D. Rockefeller IV of West Virginia and Rep. James L. Oberstar of Minnesota, to increase understanding of the role of civil aviation.
The U.S.-China aviation agreement, reached in April 1999, significantly expanded air services between the two countries. In August 1999, DOT awarded a total of 17 new weekly flights to the three U.S. carriers -- Northwest Airlines, United Airlines, and Federal Express -- already serving the market. The agreement also allowed a fourth U.S. carrier to enter the market in April 2001, and added 10 weekly flights among the U.S. carriers then able to serve the market.
Applying for the new right to serve China were American, Delta and Polar Air Cargo, as well as UPS. American, Delta and UPS each requested all 10 of the newly available weekly flights, while Polar sought six. In addition, Northwest, United and Federal Express all sought to add additional flights to their existing services.
Under the department's tentative decision, United's additional two weekly flights would be used to expand its current five weekly flights between San Francisco and Shanghai. Northwest would be able to use its additional flight to expand its current passenger service from Detroit, to expand its current all-cargo service from Chicago and Anchorage, or to begin passenger service from Honolulu. Federal Express will use its additional flight to increase its current U.S.-China all-cargo service, under which the carrier serves Beijing, Shanghai and Shenzhen.
The show-cause order, carrier applications and comments in this case may be obtained via the Internet at http://dms.dot.gov/, docket OST-99-6323.
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(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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